Today, to mark the opening of the Practising Law Institute's
49th Annual Institute, SEC Chair Clayton gave a keynote address
focused on governance and transparency, which was a surprising
direction since the program focuses heavily on capital formation.
In his remarks, Chair Clayton discussed the SEC's rulemaking
agenda. He noted that the SEC's near-term agenda will be more
limited than in prior years. In outlining key areas of attention,
Chair Clayton discussed the proxy process and shareholder
engagement. He discussed the need to ensure that the voice of
retail investors is heard. This is unusual in that so many academic
studies and popular press articles have discussed the extent to
which there has been a significant decline in the percentage of
public company stocks in pure retail hands. To the extent that
there is retail ownership it is disintermediated since ownership is
indirect through ETFs or other managed investments. In any event,
Chair Clayton questioned whether the voting decisions made by funds
are maximizing value for shareholders. Chair Clayton also discussed
enforcement initiatives and again focused on risks to retail
investors–highlighting particular areas of concern such as
fee disclosures, penny stock related fraud, and transaction
processing issues (such as those that might facilitate microcap
fraud). Chair Clayton also touched briefly on ICOs offerings. Here
is a link to the full text of the remarks:
https://www.sec.gov/news/speech/speech-clayton-2017-11-08.
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